Tuesday, April 20, 2010

$200 million per day: That's a conservative estimate of what just the airlines are losing from closure of European air space due to the volcanic eruption in Iceland. Note that this does not include other consequent losses to businesses that depend on an uninterrupted flow of passenger traffic or reliable shipping, problems for individuals stranded in airports, or any cascading effects that will result from those losses.

Are the government bureaucrats in charge of closing European airspace justified when they cite the dangers that flying through clouds of volcanic debris pose to jet engines? Or are they just repackaging the fallacy of the broken window as they wreak unnecessary havoc on the lives of millions of people worldwide?

Calling volcanic ash "the new swine flu panic," Simon Jenkins of The Guardiannotes that, "[e]ven an airline company, with everything to lose, is not allowed to assess its own risk," and Frank Furedi of Spikedrelays the following information:

Many individuals associated with the air-travel industry are perturbed by what they perceive to be a one-dimensional overreaction. Ulrich Schulte-Strathaus, secretary-general of the Association of European Airlines, observed that "verification flights undertaken by several of our airlines have revealed no irregularities at all". He believes that "this confirms our requirement that other options should be deployed to determine genuine risk". Giovanni Bisignani, director-general of the International Air Transport Association, describes the ban as a "European embarrassment" and a "European mess". [bold added, other minor edits]

Furedi's larger point is especially compelling:

[A]s a sociologist interested in the process of decision-making, it is evident to me that the reluctance to lift the ban on air traffic in Europe is motivated by worst-case thinking rather than rigorous risk assessment. Risk assessment is based on an attempt to calculate the probability of different outcomes. Worst-case thinking – these days known as "precautionary thinking" -- is based on an act of imagination. It imagines the worst-case scenario and then takes action on that basis. In the case of the Icelandic volcano, fears that particles in the ash cloud could cause aeroplane engines to shut down automatically mutated into a conclusion that this would happen. So it seems to me to be the fantasy of the worst-case scenario rather than risk assessment that underpins the current official ban on air traffic. [bold added, other minor edits]

Might these man-made effects of the Eyjafjallajokull eruption be a sort of Mini-Me of global warming hysteria?

If indeed test flights have shown negligible risk of flying after this eruption, it would seem that the precautionary principle, that bastard spawn of government control of the economy and Pascal's Wager in scientific drag, is wreaking major havoc on the world's economy. Sez Jenkins:

Many more will die on roads and elsewhere because of the anarchy the air controllers have unleashed on Europe, but that is not their business. They don't care.

Given the life-sustaining necessity of production and trade, this is at once unnecessary hyperbole and a gross understatement of the damage. Millions of lives are in fact being harmed by this barring-by-government-fiat of individuals from evaluating risks for themselves and then deciding whether to board -- or fly -- airplanes. Even if the body count is zero after this fiasco ends, it has cost millions of people irreplaceable fractions of their lives in the forms of time and money.

The computer models that guided decisions to impose a no-fly zone across most of Europe in recent days are based on incomplete science and limited data, according to European officials. As a result, they may have over-stated the risks to the public, needlessly grounding flights and damaging businesses.

...

[E]arly results of the 40-odd test flights conducted over the weekend by European airlines, such as KLM and Air France, suggested that the risk was less than the computer models had indicated.

...

"If you take the situation across the Atlantic, there the advice would probably be: don't fly over the volcano. Otherwise, it is up to you to take the precautions necessary," ...

10 comments:

Every regulation is a "precautionary disaster." The regulator forcefully imposes his judgment on all other parties. Their freedom to voluntarily reach agreements according to their own judgments is squelched.

And who is the regulator? He is someone who believes that he has the moral right to impose his judgment over all those other people. He must believe that his judgment is superior to theirs. He is also a political appointee and responds to the incentives of his bosses and the bureaucratic institution he belongs to.

Is it any wonder that every regulator displays a bias? In fact, his judgment necessarily must be different than that of the people he regulates. That is why regulators are either: (a) too conservative in their assessment of risks (e.g., this volcanic ash situation), (b) oblivious to risks - i.e., "lazy" (e.g., the SEC's evasion of the evidence presented to them of Bernie Madoff's fraud), (c) "captured" by the parties they regulate (e.g., when a regulator sets rules that favor established companies versus newcomers, evident in nearly every regulated industry such as insurance or utilities), or (d) "captured" by populist viewpoints (e.g., Ralph Naderite "consumer advocacy" and trial lawyer activism).

That individuals and companies must conform their minds and their actions to such irrationality is grotesque, to say the least. As pointed out, it destroys wealth in ways we can count but it also destroys human achievement in unseen ways that we can only imagine. Consider the entrepreneur who chooses not to start a new business because of the regulations he must fight. Or consider -- and innumerable cases like this have been documented -- the new drug that never gets developed because of the enormous costs and methodological biases that must be overcome at the FDA. Or consider the lost dollars, sundered business meetings, unmet family reunions, and ruined vacations... of those who have been stranded in Europe.

I don't know whether it is safe to fly through the remnants of the cloud ash hanging over Europe, but neither do the regulators who strut across Europe and America. This is a decision that should only be made by the airlines and their customers. The airlines have every incentive, and abundant financial means (i.e., hiring experts), to get this decision right. Their profits and reputation depend on it.

But that is the judgment that the regulator forestalls. Instead, we are subjected to their biases, biases which have the force of law.

Regulation is a form of tyranny over the mind. Regulation as a principle must be abolished. In its place, acknowledge the sovereignty of the human mind and the right of every person to act on his own judgment and deal with his fellow men on his own, voluntarily chosen terms, free from the interference of the local thug or the local regulator.

The fact that, as you say, a regulator's "judgment necessarily must be different than that of the people he regulates," reflects the fact that he is necessarily ignorant of the parameter space of the decisions faced by the individuals he regulates and is symptomatic of the fundamental philosophical fallacy in any attempt to impose a "one size fits all" solution from on high. On that latter point: Human beings are individuals. That is, while we must use the same fundamental principles to deal with reality, there can be no philosopher king because that would require omniscience.

We each have to judge the facts of reality for ourselves. Our lives depend on it and there can be no substitute.

Yes, Gus. The regulator *cannot* make the right decision because only the individual parties know what is right for them. They have the proper knowledge and the proper incentive, both of which the regulator lacks. It is their lives, after all.

However, even a well-meaning regulator destroys. He must because he is forcefully imposing his judgment over those of the people he regulates. This is true, regardless of the regulator's motive or knowledge, the latter of which can never substitute for the knowledge of each person. Each person knows his own context, which the regulator *cannot* know (unless he were that person).

Morally and practically, the only proper "regulator," is each person who is the regulator of his own life.

Indeed. At best, a regulator might accidentally impose the same course of action on someone he might have taken were he free to act on his own judgment (AND he was right!), but that is a coincidence and it comes at the cost of accepting massive violations of individual rights and the risks of imposing foolish decisions on everyone.

That's an unacceptable price and an unacceptable risk in "return" for being barred from making one's own decisions.

Without being based on all the relevant parameters, regulatory dictates have about the same epistemological validity as the squawkings of a parrot.

Yes, I can see avoiding parts of the plume that contain more than a certain amount of glass particles (determining or measuring an acceptable threshold might be problematic, but still), but entirely avoiding THAT MUCH European airspace? That's nuts, and I'm glad it's finally coming out that there is hard evidence that this is so.

But what would that accomplish? Were they held personally responsible, how could they mitigate the damages? Were the governments responsible, by what right would they compound the damage the regulatory apparatus did by stealing money from others to compensate?

The damage has been done. The only reasonable, practical recourse is to get the government out of the business of running the airlines, and allow THEM to decide whether running flights is a worthwhile proposition. They screw up (one way or the other), it's their bacon.

I have seen the relative durations of the two compared -- I think this was about twice as long. -- but that's it.

As to whether that stoppage was actually necessary after those attacks, a friend of mine noted around that time that he doubted whether a similar type of attack would even be possible now that everyone knew what the M.O.